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The cause of the blast on Istiklal Avenue was not immediately clear. Five prosecutors were assigned to investigate the explosion, state-run Anadolu news agency said.
Istanbul Governor Ali Yerlikaya tweeted the death toll and said the explosion occurred about 4.20pm on Sunday (12.30am Monday AEDT).
A video posted online showed flames erupting and a loud bang, as pedestrians turned and ran away.
Other footage showed ambulances, fire trucks and police at the scene. The cause of the explosion was not clear. Social media users said shops were shuttered and the avenue closed down.
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Broadcaster CNN Turk said 11 people were injured.
The avenue is a crowded thoroughfare popular with tourists and locals, lined by shops and restaurants.
Turkey was hit by a string of deadly bombings between 2015 and 2017 by the Islamic State group and outlawed Kurdish groups.
